French Telecom Giant On Armenian Bidding Shortlist

A subsidiary of France Telecom and two other European mobile phone companies have been shortlisted in an international tender for the right to become Armenia’s third wireless operator, the Armenian government announced on Wednesday.

Armenia’s Public Services Regulatory Commission (PSRC) called the tender in mid-July, saying that its prospective winners will have to pay at least 10 million euros ($14.6 million) for the operating license and pledge at least 200 million euros in capital investments.

According to the Ministry of Transport and Communications, 17 foreign companies expressed an interest in the bidding but only six of them formally applied for pre-qualification afterwards. The ministry said in a statement that three of them -- France Telecom’s wireless division Orange, the British-Irish group CEO Blackrock Communications and Sweden’s M$A Tele2 AB -- have been shortlisted for the final selection process.

“In the next 40 calendar days, the companies that have passed pre-qualification are to submit bids to the commission administering tender, which will determine the winning company after examining them,” read the statement.

Orange is Europe’s second largest mobile phone company, boasting tens of millions of cellphone subscribers in France, Britain, Belgium, Portugal, Germany, Italy, and Eastern Europe. Its desire to expand into Armenia came as a surprise given the small size of the local market for telecommunication services.

The Armenian government decided last year to further liberalize the sector despite an explosion in mobile phone use in the country that followed the abolition in late 2004 of the ArmenTel national telecom company’s monopoly on the wireless service. The government says the launch of a third network will make the service even more accessible and affordable for Armenians.

There are currently an estimated 1.8 million mobile phone users in the country making up 60 percent of its population. More than two-thirds of them are subscribed to the VivaCell network owned by Russia’s largest wireless operator, Mobile Telesystems (MTS). ArmenTel, which operates the other cellphone network, is controlled by another Russian telecom giant, Vimpelcom.

Russia’s third largest mobile phone company, Megaphone, was for months tipped to become Armenia’s third wireless operator. However, it chose to opt out of the ongoing bidding for unknown reasons.